Choosing a Secured Credit Card after Filing for Bankruptcy

Secured credit cards are a viable option for those who have recently filed for bankruptcy. Getting a credit card after bankruptcy can help a person rebuild and reestablish credit after wiping out past debts. It is important to understand the function of a secured credit card, as well as the advantages and potential risks of using such a card.

What is a secured credit card?

A secured credit card requires a security deposit to establish a line of credit. This deposit is refundable assuming the user adheres to payment terms and conditions. Other fees and interest rates may apply.

A creditor may require a deposit of anywhere from several hundred several thousand dollars. Many banks and credit card companies offer secured credit cards as a product to those looking to reestablish credit.

How a Secured Credit Card Impacts Credit Score

Secured credit cards, just as “regular” unsecured credit cards, are reported to credit bureaus. This gives the user an opportunity to rebuild and restore credit. Ideally, a consumer should choose a company that reports payment history to the three major credit bureaus on a monthly basis.

The most effective way to impact one’s credit score is to always make your monthly payments. If possible, pay more than the minimum payment. This demonstrates fiscal responsibility to the credit bureaus. On the other hand, a missed payment can damage a credit score, just as it would with an unsecured credit card. It also is advisable to keep a low monthly balance. This keeps any interest rates in check and makes it easier to adhere to a monthly payment schedule.

Choosing a Secured Credit Card after Bankruptcy

A person who has recently filed bankruptcy will have special financial concerns and considerations. As such, it is important to first establish a budget before applying for a secured credit card. Opt for a secured credit card that is affordable and realistic given available financial resources.

This may mean starting out with a low credit line and slowly building over time. Eventually, it may mean getting an unsecured credit card once you reestablish your credit score. Always examine your budget when deciding whether to increase your credit line or get a new credit card.

Special Considerations of a Secured Credit Card

Not all secured credit cards are created alike. Financial experts urge those who are coming out of bankruptcy to exercise caution when getting credit card. While many offer feasible options for rebuilding credit, others may contribute to financial instability due to high monthly fees and other hidden costs.

Working with a financial expert may be helpful in avoiding some of the missteps commonly associated with getting a credit card after bankruptcy and establishing post-bankruptcy credit.

If you have questions about how to file for bankruptcy in Texas, contact a Dallas area bankruptcy attorney at Warren & Migliaccio. We can talk to you about your options and answer your questions about chapter 7 or chapter 13 bankruptcy. Call us at 888-584-9614 or complete this online consultation form.

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We worked with Chris and other staff. Chris from the start really worked with us as we were unsure what to do next and what was the best option for us. Chris spent a great deal of time with me on the phone, over email as well as meeting with my husband and I in his office. It can be scary to have the unknowns as we did and he really helped. When dealing with things you just don't know about you have to find someone you can trust to lean on and let them handle it; you can't be an expert on everything. The staff were so helpful and there was never a question on what we needed to get them or needed to do during the process. We were prepared 100% for what was to come and even months after the staff was quick to follow up to make sure that we did not have any questions or have anyone contacting us. They even helped figure out the 'what next' and 'where to go from here' that comes up. I would recommend them to anyone finding themselves facing financial struggle and trying to decide what to do. They give a free consultation over the phone or in the office; worth the call to find out your options.

I recommend Warren and Migliaccio to anyone who like myself, had no idea of what to do next. They were open and honest to me about my bankruptcy. They took time and explained the whole process to me beforehand. I was treated I'm sure, as their more prominent clients even though I'm a single senior with a limited income. They helped me maintain my dignity and I'm sure my sanity too.

I would strongly recommend anyone needing a family law attorney use this office. The staff is so friendly, helpful, and knowledgeable. Gary Warren and Ryan Bauerle were the ones that helped me with a very rough child custody case and they were absolutely amazing. They are very nice guys but they will fight for you!!! I am truly happy that I used them for the case, I could not have asked for a better attorney! Ryan helped me and my husband so much and explained everything so well to us! I can't thank them enough for all they did for me and my family! So anyone please take my advice, if you need a family law attorney give Ryan a call!!!

Everyone in this attorney's office was wonderful! We had one matter that we needed assistance with last year, but they were not able to assist us with it, however Christopher Migliaccio was kind enough to provide us with a list of attorneys who would be able to help. Over the last couple of weeks, we decided to update our wills and powers of attorney and it could not have been any easier to do. They made it so we only had to make one trip to their office to take care of everything. If we need anything else, I would be most happy to do business with them again!